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Swissport Seeks Support to Raise up to $417 Million of Loans (1)

May 21, 2020, 7:55 AM

Swissport International AG is seeking permission from its creditors to raise as much as 380 million euros ($417 million) of new financing to buttress its balance sheet amid the pandemic crisis.

The airport baggage handler, owned by Chinese conglomerate HNA Group Co., is asking to change the terms of bonds and loans to raise the new financing, which will rank senior to its existing debt, it said in a statement late on Wednesday.

As part of the transaction, Swissport may apply for a U.K. scheme of arrangement, a court process which allows to change debt terms with support from 75% of creditors, and a U.S. Chapter 15 filing under the U.S. Bankruptcy Code.

The company has been impacted by the slump in air travel which has forced it to seek help from governments in countries where it operates. It had more than 350 million euros of cash on its balance sheet as of mid-May, more than it originally expected at the beginning of the global lockdown, it said in the statement.

The company, which hired Houlihan Lokey Inc. and White & Case as advisers last month, has about 1.6 billion euros of debt, which it refinanced last year.

Apollo Global Management has been one of the biggest buyers of its secured debt over the last two months. Secured creditors will be able to participate in the new money offering.

Swissport bonds due 2024 gained 3.5 cents on the euro to 71 cents, while unsecured notes due 2025 are little changed at 7 cents, according to data compiled by Bloomberg.

“The amendment request could be the prelude to a financial restructuring,” Lucror Analytics wrote in a note to clients. “The group could be seeking to boost its financial flexibility before approaching creditors with such a proposal.”

(Updates with bond prices and analyst comment in final two paragraphs.)

To contact the reporters on this story:
Luca Casiraghi in London at lcasiraghi@bloomberg.net;
Irene García Pérez in London at igarciaperez@bloomberg.net

To contact the editors responsible for this story:
Vivianne Rodrigues at vrodrigues3@bloomberg.net

Nikolaj Gammeltoft, Chris Vellacott

© 2020 Bloomberg L.P. All rights reserved. Used with permission.